Uber: How fight for Indian taxi market ended up in court

Corporate News

Uber alleges competitor Ola created about 94,000 fake user accounts and used them to make over 405,000 false bookings. PHOTO | AFP 

In Summary

• Uber is suing Ola for $7.5 million to compensate for lost revenue and goodwill, alleging it created about 94,000 fake user accounts and used them to make over 405,000 false bookings.
• In court documents, Uber says it found 660 accounts used to make troublesome bookings came from a building housing Ola's office in the western city of Pune.
• Uber said more than 23,000 of its drivers quit due to "illegal and wrongful interference" between September 2015 and February 2016.
• The case paints a picture of a no-holds-barred corporate battle between the two start-ups in one of the world's fastest growing taxi markets, where both have been burning millions of dollars of investor money as they seek to undercut each other with cheaper fares.

A flurry of complaints from Uber drivers about an unusually high number of cancelled bookings was the spark that ignited a bitter legal fight with Ola, Uber's rival for dominance of India's $12 billion taxi market, according to court documents and a source with direct knowledge of Uber's case.

A seven-member internal team was set up to investigate the drivers' complaints in November, and its findings are the basis of a lawsuit filed by Uber accusing Ola of a campaign to disrupt its business and poach its drivers, said the source.

Ola, an Indian company backed by Japan's SoftBank Group Corp, denies any wrongdoing.

Uber is suing Ola for $7.5 million to compensate for lost revenue and goodwill, alleging the Indian market leader created about 94,000 fake user accounts with the ride-hailing service and used them to make more than 405,000 false bookings.

The broad outlines of the lawsuit were reported when it was filed last month, but a Reuters review of court filings and interviews with sources close to both sides have uncovered new details about how Uber says it was able to trace fake bookings and calls to Ola employees, and Ola's response to the allegations.

It paints a picture of a no-holds-barred corporate battle between the two start-ups in one of the world's fastest growing taxi markets, where both have been burning millions of dollars of investor money as they seek to undercut each other with cheaper fares.

A source close to Ola said the case against it had been fabricated in retaliation for a lawsuit it had filed earlier this year accusing Uber of flouting a court order to switch to clean-fuel cars in the Indian capital.

Uber said it could not comment on a matter that was still before the courts, and Reuters was unable to independently verify the allegations made by either side.

SoftBank, one of Ola's largest investors, declined to comment on the case.

Investigation

Uber's investigation identified locations and internet protocol addresses of tens of thousands of users who had booked and canceled rides, using information logged when a new customer account is created on Uber's platform, the source familiar with the company's case said.

In court documents, Uber says it found 660 accounts used to make troublesome bookings came from a building housing Ola's office in the western city of Pune.

Most of the rest were created near Ola's office in the tech hub Bengaluru, it said.

In the court filings, Uber said more than 23,000 of its drivers quit due to "illegal and wrongful interference" between September 2015 and February 2016.

The source close to Ola said the company had made its own checks and found no correlations in the thousands of data points submitted by Uber in its complaint, which included names and mobile phone numbers alleged to belong to Ola employees.